Yes Bank customers can get allotment in SBI Cards’ IPO — but with a condition

Yes Bank account holders who have invested in the SBI Cards’ initial public offering (IPO) will be allotted shares but with a condition that they make payment using an alternate bank account.

They will have to make this payment within two days.

Of a total of ₹10,300 crore share sale, bids worth approximately ₹1,500 crore came from YES Bank accounts — including retail investor bids of ₹150 crore.

The financial crisis of Yes Bank has landed its customers in trouble. The Yes Bank account holders who have invested in the SBI Cards’ initial public offering (IPO) via the demat account can also get their share allotment - albeit with a condition. They will have to make a payment using an alternate bank account.

Yes Bank customers will have to make the payment within two days. However, in the current situation, the payment might not happen on time as the shares would be allotted today. “ Some investors may not have sufficient funds in other bank accounts to pay, while others might deliberately not pay, given the volatility in the market,” a brokerage official
told Business Standard.

In case investors fail to make the payment, the sale component of the IPO will be reduced. The bank will thereby divest slightly less than what was decided in the first place. The IPO accounted for ₹500 crore of fresh equity and ₹9,800 crore of secondary shares.
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The second largest credit card company will foray into the stock market on March 16 (Monday).

Shares worth ₹10,300 crores concluded on March 6 and the final price per share has been set at ₹755. Of this, bids worth approximately ₹1,500 crore came from YES Bank accounts — including retail investor bids of ₹150 crore. The fourth largest private sector bank has over ₹3.45 lakh crore assets and a
deposit base of more than ₹2 lakh crore.

The development comes in the back of the ongoing 30-day moratorium period — where the Reserve Bank of India (RBI) had capped the withdrawal limit for customers to ₹50,000 until April 3, 2020. However, an administrator of the bank later said that it might be lifted by the end of the week.

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The stock broker association Anmi (Association of National Exchanges Members of India) also urged the RBI to relax the conditions imposed against the Yes Bank payments and transactions.

“The RBI decision has a cascading effect on trading members and their clients at large since they may not be able to cover their positions from their own funds. Thus, many Yes Bank clients may face serious financial problems,”
said the letter written to the central bank by the association members.

The SBI Cards IPO has also come at a time when the coronavirus outbreak has had a big impact on global and Indian financial markets.
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